Home Depot Got $730 Million Back in Tariff Refunds and Shoppers Got Nothing

The Supreme Court ruled in February that many of the tariffs were illegal. More than $160 billion is being refunded because of it, and almost none of it is going to the people who paid higher prices.

Who Is Collecting

Home Depot received approximately $730 million in tariff refunds last quarter. Chief Financial Officer Richard McPhail said the company would use the money to cover new costs from pricier gasoline and diesel, which he expects will fully offset the benefit from tariff refunds over the year.

Walmart received most of the $2.9 billion it was eligible for and plans to put it toward price reductions rather than direct customer refunds. That is closer to a pass-through than most, and it is still not a refund.

The Three Companies That Will Hand It Back

UPS, FedEx and DHL have each pledged to return refunds to customers. UPS has indicated the process could take up to 90 days after it receives the funds from U.S. Customs and Border Protection.

This is the one place a reader has a real claim. Anyone who personally paid a duty or a brokerage fee on an international shipment through one of those three carriers is in line for money back. Anyone who simply paid a higher price at a store is not.

The Customers Who Went to Court

Costco and Nintendo are both facing lawsuits from customers seeking refunds. Nintendo argued in court filings that customers received exactly what they paid for, which it described as Nintendo products that plaintiffs knowingly and voluntarily purchased at the advertised price.

Those cases are filed complaints and nothing has been decided in them.

The Structural Answer

The tariff was legally owed by the importer, so the refund is legally owed to the importer. The consumer who absorbed the cost in the shelf price was never the party to the transaction, which is why there is no mechanism to route the money back down.

Michael Ettlinger of the Institute on Taxation and Economic Policy described the result as a giant transfer from consumers to corporations. Six months after the ruling, the refunds are moving and the direction they are moving is up.

References: Businesses are getting tariff refunds. Why aren’t consumers getting their cut?